esg is short for Environment, Social and Governance, a set of practices adopted by enterprises that act with social responsibility in favor of sustainability. These are the companies that have felt the business needs to be committed to effect It affects the environment and society.
For Daniela Garcia, an expert in Internet brand positioning strategy and consumer relations, these are the companies that will be able to move forward. Daniela is also Director of Operations at Institut Capitalismo Consiente Brasil (ICCB), the organization responsible for content and training for leaders who want to become more aware of their impact on their environment. Next, she gives further clarification on the subject.
What is ESG? How does this affect small businesses?
ESG stands for Environment, Social and Governance or Environment Environmental, Social and Governance. These are essential sustainability criteria for companies around the world. The concept is not new, but it became operational with the pandemic. Companies need to be aware of the impact of their products and services on society and the world. This urgency for sustainability was heightened with the creation of the United Nations Sustainable Development Goals (SDGs) in 2015, and more recently with the climate crisis. When the topic came up in the financial sector, companies really focused on their responsibility to the planet.
Companies that don’t see their stakeholders — the interest groups around them — can’t move forward. Considering employees, the supply chain, customers and society alike, it is essential for a company to build good relationships in its environment and generate shared value. The ESG came to prove that companies’ results needed to be linked to this collective awareness. All businesses will be affected by ESG, regardless of their size. It doesn’t matter when the focus is on caring for society, the environment and transparency.
How can small businesses achieve sustainability as a brand value?
According to a survey conducted by the agency Union + Webster in 2019, 87% of the Brazilian population prefers to buy from permanent companies and 70% said they don’t mind paying a little more for it. This consumer is very attentive to the values of a brand. What does this brand do for the environment? Is he involved in slave labor? Does he have any responsibility towards his employees? Are your products sustainable? What social projects is she engaged in? Any company can make it transparent. Start by showing your purpose, what you do, highlight relevant numbers, hire variety, comment on how you treat your waste and packaging. Transparency is at the heart of governance.
You criticize companies that give speeches about ESG and do not apply it in practice.
Those who are actually engaged in ESG show what they do, but first do it internally. ESG begins by aligning the objective with a strategic action plan. Then comes communication, which cannot be sustained without a solid internal foundation, if the company lies or just does marketing, consumers will notice and the brand will suffer doubly. Who hasn’t seen the crisis caused by consumers on social media?
In times of economic crisis, when the company just wants to survive, is it possible to think about ESG?
Given the sustainability standards, it doesn’t cost much; Not seeing can hurt. See the issue of solid waste: Companies are responsible for their waste, packaging and its destination. Not taking care can lead to fines and reputation problems. A micro-entrepreneur or MEI can segregate the waste and dispose it properly. Any action, be it a person or legal entity of any size, is relevant. Think about issues of diversity and inclusion. Diversity is key to generating a more creative environment. Hire people of different gender, race, color and age. There is no longer a cost to be transparent with employees and customers. But it gives importance to the brand. In the hands of the government and clearly the control of the company.
What is Conscious Capitalism?
It is a movement that emerged in the United States in the early 2000s from a study by Professor Raj Sisodia. Its purpose was to verify how companies maintained high reputations and customer loyalty without excessive investment in advertising and marketing. John McKay, CEO of Whole Foods, an American supermarket chain, identified the characteristics and approaches he applied to his business over the years. Together they founded the movement to bring together companies that identified themselves as conscious capitalists, whose practice is based on four pillars.
The first is the greater purpose, which is the reason for which it exists. The second is conscious leadership. Leaders are responsible for serving the purpose of the organization by creating value for their stakeholders and cultivating a conscious culture of trust and care. The third is stakeholder orientation. The business must understand that it is part of a system that has diverse stakeholders and generates a relationship of shared value with all. Finally, there is the conscious culture, which is the incorporation of values, principles and practices embedded in the social fabric of a company. It connects stakeholders to each other and to your purpose.